Circular economy (CE) principles are gaining momentum in the political, economic, and scientific fields and growing in popularity in corporate strategies as well as among local and national governments—including China, Japan, the U.K., France, Germany, Canada, the Netherlands, Sweden, and Finland.
Oftentimes used in conjunction or synonymously with CE is the term “sustainability,” arguably the most misconstrued descriptor of the decade, ubiquitously interwoven into the decarbonization, energy transition, and waste minimization narrative. However, although there is a relationship between sustainability and a CE, these two concepts are vastly distinct.
Sustainability: A Systems-level Approach
Sustainability in its truest form is a systems-level approach that considers the wide array of environmental, social, and economic factors and assesses how they interact (Figure 1). It evaluates, as examples, geopolitics, impacts to indigenous communities, sociotechnical capabilities and other subdomains.
Figure 1. Sustainability
Author’s rendition
Sustainability involves quantifying and understanding the risks, trade-offs and unintended consequences, from a life cycle perspective, across the entire value chain. This is what leads to long-term system balance. There is very little understanding or application of this in today’s policies and decision-making. Although there is an environmental dimension, sustainability is far more complex than simply focusing on conservation/preservation, choosing presumed eco-friendly options, or switching to alternative energies. A comprehensive understanding of the impact on the overall system and of any potential risk shifting is needed before an action, policy, or product is deemed sustainable.
Theoretically, sustainability is not a property of something. Things in isolation cannot be sustainable, (i.e. paper straws, solar panels, electric vehicles, etc). Sustainability is a feature of a system in its entirety, not a singular focus on any individual part. It embodies how the parts interrelate to enable effective overall outcomes. From a sustainability perspective, individual parts cannot be optimized without optimizing the whole. For example, an electric vehicle is not sustainable if we factor in the unquantified and unaccounted social and environmental impacts that span the lifecycle of the lithium-ion battery that powers the vehicle—from mining, processing, smelting, trade, and transportation across the globally networked supply chain to the lack of recycling and reuse options for the battery at its end-of-life. The geopolitics and human rights violations involved in such processes, as well as the potential of operating in sensitive environments and collaborating with corrupt regimes that have weak or absent environmental, safety, and labor laws, can also undoubtedly affect a system’s overall sustainability profile.
This scenario is why sustainability imparts such a distorted and complicated challenge to our existing utilitarian structure, because traditionally we exercise a very systematic and diagnostic method to management and policymaking. We disassemble, dissect and examine systems into their constituent components, analyze and aggregate the parts and then attempt to synthesize and optimize, assuming that if all the portions are seemingly functioning, the whole is effective. This superficially plausible façade emerges when a limited perspective of sustainability is leveraged, and it ultimately inhibits systems balance.
In assessing something as complex as an entire economy or global supply chain, it becomes even more critical to understand how the components synchronize and integrate into the whole network. Focusing solely on the individual parts invariably shifts risks elsewhere in the system, thus yielding unsustainable and undesirable outcomes.
How Does a CE Relate to Sustainability?
The CE (Figure 2) is presumed to have the potential to interrupt the current linear economy of unsustainable production, consumption, and waste generation by encouraging system innovation that designs out waste, increases resource efficiency, keeps materials in use, and decouples growth from the consumption of finite resources—thereby achieving a healthier balance between the economy, the environment, and society. The ultimate objective is to transition to a regenerative circular system where the societal value of products, materials, and resources is maximized over time. CE builds resilience against future disruptions—like pandemics, extreme and punctuated weather events, or the impacts of a changing climate.
Figure 2. Circular Economy
Author’s rendition
Sustainability, mediated by innovation, can enable a CE, and a CE can be a means or stepping stone toward the alignment between the three dimensions of sustainability.[1]
However, circularity in and of itself does not guarantee positive social, economic, and environmental performance (i.e., sustainability). Just as sustainability can be misrepresented, a CE is accompanied by vast versatility, wide-ranging scope and applications, and definitional ambiguities. In fact, some actions are favorable to and increase circularity yet lead to unintended externalities that shift the sustainability profile. For instance, a number of life cycle assessments demonstrate that some alternatives to plastics perform poorly from an energy and resource standpoint.
And while circularity has proliferated and concept of sustainability took reign in policy and economic discourse, no methods or combination of methods exist that quantify the sustainability impacts of circular strategies.[2]
How Do We Establish Connectivity to Ensure System Balance?
China, ostensibly the global trailblazer in CE, has made circular strategies a part of their national priorities since the early 2000s, recently releasing its 14th Five-Year Plan (2021-25). Although the United States
USM
does not have a national CE strategy, the framework is trickling into federal and state level policy discussions and finding its way into many corporate sustainability plans.
Ensuring a successful transition to a sustainable CE requires a common understanding of and approach to circularity; an acknowledgment of circularity’s relationship and contributions to sustainability and long-standing waste management principles; and the ability to consistently measure and report at the microlevel (i.e., a single firm, product, or process) and macroscale (i.e., an entire enterprise; a local, regional, or national government; or even a global system). Incorporating systems-level thinking into new policies and joining forces across the value chain can minimize the impacts of sourcing and extraction and can improve recycling and waste management.
The preparation and conversations should start now about how we can optimize human, capital and natural resources to create a circular and sustainable economy. When assessed through the lens of systems sustainability, circularity can uncover new investment opportunities, create novel business models, encourage innovative products and technologies, foster supply chain collaboration, and build an economy that is far more resilient against future global disruptions.
Rachel A. Meidl, LP.D., CHMM, is the fellow in energy and environment at Rice University’s Baker Institute-Center for Energy Studies.
[1] Rossi, E., Bertassini, A. C., dos Santos Ferreira, C., do Amaral, W. A. N., & Ometto, A. R. (2020). Circular economy indicators for organizations considering sustainability and business models: Plastic, textile and electro-electronic cases. Journal of Cleaner Production, 247, 119137.
[2] Walzberg, J., Lonca, G., Hanes, R. J., Eberle, A. L., Carpenter, A., & Heath, G. A. (2021). Do we need a new sustainability assessment method for the circular economy? A critical literature review. Frontiers in Sustainability, 1, 12.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
